Smaller Firms Say E-Logs Will Drive Them Out of Business and Violate Personal Privacyby Jana Ritter - Published: 10/14/2016
There has been much controversy in the trucking industry regarding the mandated switch to electronic logs by late December 2017 and while many truck drivers already foresee the difficulty it will impose on doing their job, smaller trucking companies say the new system will simply drive them out of business. Independent operators say it's a complete violation of personal privacy.
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The Federal Motor Carrier Safety Administration (FMCSA) initially implemented the regulation saying it would help protect the safety of both truck drivers and motorists by preventing exhausted truckers from driving. The FMSCA forecasts the move will save 26 lives per year and prevent 562 injuries, and also protect truck drivers from companies who pressure them to drive longer hours or even fudge their logs. The FMCSA also released a cost-benefit analysis and estimated the new system would cost trucking companies $1.8 billion to implement it, but reasoned that fewer crashes and less paperwork would ultimately save $3 billion.
However, many industry experts argue that whatever savings the FMSCA predicts, the smaller firms and independent owner operators are not only going to be harder hit by the cost of the switch, they will also take a productivity hit and have more difficulty paying off their trucks (which have doubled in price since 2000.) In fact, a trucking industry survey conducted in early 2016 of mainly small operators found that 84 percent still don’t operate with electronic logs and some say in addition to avoiding the cost of the switch, paper logs allow these companies to fudge the books to help boost their bottom line. There is also the argument that small to mid-size trucking firms will need to employ more drivers to haul the same amount of freight in order to make it.
“Some of the smaller companies are just not going to survive the change to electronic logs,” said Dan Clark, head of BMO Transportation Finance. Most of the bigger trucking companies such as Schneider National, Swift Transportation, etc. have been using electronic logs for years and they do admit that the new logs reduce their drivers’ miles on the road. Cutting down driver miles means all companies face higher spending for additional drivers to haul freight and we can only predict that it will lead to higher consumer prices unless companies find ways to get more productivity out of their trucks.
“This will be the single biggest thing to hit our industry since deregulation in 1980, which reduced government controls on trucking rates and routes,” says Chris Lofgren, CEO of Schneider National. However, the benefit of having more company drivers has allowed these bigger firms to offer more flexible schedules and can cater to those who want weekends at home and to those who want longer routes paying more money.
According to the FMCSA, the new rule will affect nearly 3.4 million drivers. But before it officially kicks in at the end of next year, independent truck driver associations are trying to put on the brakes and challenging it in court for violating driver privacy.